Cotton market remained bearish in March

Mumbai, Apr 23 (UNI) Prices in the domestic cotton market had witnessed a reversal in February with prices of all varieties falling to lower levels.

This downtrend continued during March also, the half-way mark of 2005-06 season, according to a latest bulletin issued by the East India Cotton Association.

Barring the medium staple cotton--J-34-- whose average price remained almost unchanged, average prices of all other cotton varieties showed a decline in March. While, the decline from February level was marginal, ranging from 0.4 per cent to 1.8 per cent in the case of superior medium and long staple cottons, it was quite substantial at 6.3 per cent or Rs 761 per quintal in the case of the extralong staple cotton, DCH-32.

Reports indicate that arrivals so far have crossed 200 bale mark while about 40 lakh bales more are expected in the next few months.

In the case of DCH-32, prices had shot up to unprecedented levels by January and were to come down once the initial spurt in demand receded.

In the international market also, cotton prices showed some weakness in March. From an average of 59.65 US Cents (USC) per pound in February, the cotlook A Index slid to an average of 57.80 USC per pound in March.

This might also have exerted some influence in imparting a bearish sentiment to the domestic market.

Although recent reports point to a slight drop in the current season's estimated crop, supplies are bound to be quite abundant so as to facilitate exports in excess of 30 lakh bales.

According to trade circles, about 30 lakh bales have already been contracted for exports and five to eight lakh bales more could be committed before the season comes to a close. Overall, the supply demand balance is epxected to be evenly maintained now without putting too much pressure on prices to swing them violently either way.

UNI VD-AR KD AW0941